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Sandwiches, Subs and Wraps - US - August 2018

"The sandwich, sub, and wrap market has continued to engage consumers with premium, innovative, and tasty fare. Many fast casual sandwich stores and fast food chains are expanding units and growing sales. However, the category is crowded, with grocery stores, convenience stores, and coffee shops creating a complex, competitive landscape. Sustained growth will hinge on meeting consumers’ quest for value, taste, and freshness. This will need to be balanced with expectations for the choice, speed, and convenience prized by diverse, tech-savvy iGen and Millennial consumers."

– Amanda Topper, Associate Director - Foodservice

This report examines the following issues:

  • Crowded landscape is getting ever more competitive
  • Dining out less and other factors undercut sandwich shop purchases
  • Buying sandwiches widely considered indulgent, and meats too processed

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • The issues
            • Crowded landscape is getting ever more competitive
              • Figure 1: Increase usage of purchase of sandwiches, subs, and wraps in last year, by location, May 2018
            • Dining out less and other factors undercut sandwich shop purchases
              • Figure 2: Reasons for decreased purchase of sandwiches, subs, and wraps in last year, at any location, May 2018
            • Buying sandwiches widely considered indulgent, and meats too processed
              • Figure 3: Attitudes related to sandwich meats and sandwiches as indulgence, May 2018
            • The opportunities
              • High engagement among 18-34-year-olds and parents
                • Figure 4: Increased purchase of sandwiches, subs, and wraps in last year, at any location, by age and parental status, May 2018
              • Variety, innovation, and high-quality ingredients widely sought
                • Figure 5: Interest in innovations in sandwiches, subs, and wraps, for 18-34-year-olds and parents, May 2018
              • Interest high in loyalty programs, mobile apps, and delivery
                • Figure 6: Attitudes related to time saving, loyalty programs, delivery, and ordering, for 18-34-year-olds and parents, May 2018
              • What it means
              • The Market – What You Need to Know

                • Fast food and fast casual are dominant, well-established channels
                  • Positive macroeconomic trends drive growth, but landscape competitive
                    • Younger consumers are engaged, shaping market looking forward
                      • Natural, free-from, and more sustainable fare
                      • Market Perspective

                        • At home versus away from home eating
                          • Figure 7: At-home and away-from-home food sales, January 2003-April 2018
                        • Consumers look beyond QSRs and LSRs to buy sandwiches
                          • Figure 8: Increase usage of purchase of sandwiches, subs, and wraps in last year, by location, May 2018
                        • Blurring of traditional grocery stores and foodservice
                          • Convenience stores expanding reach into sandwich, wrap, and sub market
                            • Figure 9: Sandwich menu incidence, by segment, Q1 2015-Q1 2018
                          • Coffee shops and Breweries grow sales thanks to allegiance of Millennials and iGen
                            • The “bowl” meal continues to evolve, competes with sandwiches
                            • Market Factors

                              • Macroeconomic landscape is positive for discretionary spending
                                • Figure 10: Consumer confidence and unemployment, 2000-June 2018
                              • Younger consumers key in shaping future market
                                • Figure 11: US Population aged 18+, by generation, 2013-23
                                • Figure 12: US population aged 18+, by age, 2013-23
                              • Multicultural diversity shapes consumer base as well as tastes
                                • Figure 13: Distribution of population, by age, race, and Hispanic origin, 2018
                              • Parents are highly engaged and bring “foodie” sensibilities to market
                                • Fighting obesity and improving the quest for quality ingredients
                                • Key Players – What You Need to Know

                                  • Fast casual sandwich chains stand out with fresh and innovative fare
                                    • Chick-fil-A and Arby’s continue to build share in sandwich market
                                      • Subway continues to struggle, and overexpansion plagues others
                                        • Technology transforms sandwich ordering, delivery, marketing
                                          • High-end sandwiches and the fast fine movement
                                          • What’s Working?

                                            • Fast casual sandwich chains continue growth and innovation
                                              • Fresh ingredients and fast delivery
                                                • Unique stories with local connections and/or community activism
                                                  • Fun, original, and kid-friendly approaches and environments
                                                    • Clean, natural, and organic fare
                                                      • International, regional tastes and new takes on classic fare
                                                        • Chick-fil-A and Arby’s continue to make in-roads and grow sales
                                                        • What’s Struggling?

                                                          • Struggles of some reflect competitive landscape, dangers of overexpansion
                                                            • Quiznos shrinks to fewer than 400 locations
                                                              • Behemoth Subway struggles to revamp and revitalize
                                                                • Potbelly tries to consolidate and turn around losses
                                                                • What’s Next?

                                                                  • Technology is transforming wider foodservice landscape
                                                                    • Panera Bread showcases successful innovations in digital integration
                                                                      • High-end sandwiches and the fast fine movement
                                                                      • The Consumer – What You Need to Know

                                                                        • Fast food tops range of locations used for sandwich purchase
                                                                          • 18-34-year-olds and parents buying more from range of locations
                                                                            • Men more likely to be buying more sandwiches than a year ago
                                                                              • Dining out less is prime reason for reduced sandwich purchases
                                                                                • Wraps, meats, and varied sauces are in high demand
                                                                                  • Interest is high in innovation, loyalty programs, mobile apps, and delivery
                                                                                    • More variety and sliced-to-order ingredients are widely desired
                                                                                    • Purchase Location of Sandwiches, Subs, and Wraps

                                                                                      • Fast food and fast casual are dominant, well-established channels
                                                                                        • Figure 14: Total revenues for restaurants and other eating places, by segment share, at current places, 2015-22
                                                                                      • Fast food tops range of locations used for sandwich purchase
                                                                                        • Figure 15: Purchase location of sandwiches, subs, and wraps in last three months, May 2018
                                                                                      • Those who buy at fast food, also turn to range of other locations
                                                                                        • Figure 16: Purchase location of sandwiches, subs, and wraps in last three months, by purchase location of sandwiches, subs, and wraps in last three months, May 2018
                                                                                      • 18-34-year-olds are most likely to buy from wide range of locations
                                                                                        • Figure 17: Purchase location of sandwiches, subs, and wraps in last three months, by age, May 2018
                                                                                        • Figure 18: Purchase location of sandwiches, subs, and wraps in last three months, by age, May 2018
                                                                                      • Less-affluent favor fast food venues, grocery and convenience stores
                                                                                        • Figure 19: Purchase location of sandwiches, subs, and wraps in last three months, by household income, May 2018
                                                                                      • Parents buy sandwiches at range of venues
                                                                                        • Figure 20: Purchase location of sandwiches, subs, and wraps in last three months, by parental status, May 2018
                                                                                        • Figure 21: Purchase location of sandwiches, subs, and wraps in last three months, by parental status, May 2018
                                                                                    • Changes in Segment Visitation

                                                                                      • Increase in purchases through grocery and convenience stores
                                                                                        • Figure 22: Change in frequency of purchase of sandwiches, subs, and wraps in last year, by location, May 2018
                                                                                        • Figure 23: Change in frequency of purchase of sandwiches, subs, and wraps in last year, by location, part II, May 2018
                                                                                      • Youngest consumers are buying more
                                                                                        • Figure 24: Increased purchase of sandwiches, subs, and wraps in last year, at any location, by age, May 2018
                                                                                      • Men more likely to be buying more sandwiches than a year ago
                                                                                        • Figure 25: Increased purchase of sandwiches, subs, and wraps in last year, at any location, by gender, May 2018
                                                                                      • Most affluent are the least likely to be buying more often
                                                                                        • Figure 26: Increased purchase of sandwiches, subs, and wraps in last year, at any location, by household income, May 2018
                                                                                      • Almost half of parents increase purchasing, relative to a year ago
                                                                                        • Figure 27: Increased purchase of sandwiches, subs, and wraps in last year, at any location, by parental status, May 2018
                                                                                      • Blacks and Hispanics stand out for increased purchase in past year
                                                                                        • Figure 28: Increased purchase of sandwiches, subs, and wraps in last year, at any location, by race/Hispanic origin, May 2018
                                                                                    • Reasons for Decreasing Purchase

                                                                                      • Dining out less often is prime reason for fewer sandwich shop purchases
                                                                                        • Figure 29: Reasons for decreased purchase of sandwiches, subs, and wraps in last year, at any location, May 2018
                                                                                      • Women more likely to report dining out less often and cite cost as issue
                                                                                        • Figure 30: Reasons for decreased purchase of sandwiches, subs, and wraps in last year, at any location, by gender, May 2018
                                                                                      • Income shapes reasons consumers cut back on purchase
                                                                                        • Figure 31: Reasons for decreased purchase of sandwiches, subs, and wraps in last year, at any location, by household income, May 2018
                                                                                    • Appealing Types of Breads

                                                                                      • Wraps appeal to more than half of sandwich buyers
                                                                                        • Figure 32: Appealing types of bread for sandwiches, subs, and wraps, May 2018
                                                                                      • TURF analysis shows which bread options can maximize reach
                                                                                        • Figure 33: TURF analysis – Bread preferences, May 2018
                                                                                      • Wraps are especially appealing to youth, multigrain to those 55+
                                                                                        • Figure 34: Appealing types of bread for sandwiches, subs, and wraps, by age, May 2018
                                                                                      • Wraps appeal to women, while men value hoagies and pretzel bread
                                                                                        • Figure 35: Appealing types of bread for sandwiches, subs, and wraps, by gender, May 2018
                                                                                      • Household income drives interest in wider range of breads
                                                                                        • Figure 36: Appealing types of bread for sandwiches, subs, and wraps, by household income, May 2018
                                                                                      • Parents find wide range of breads appealing
                                                                                        • Figure 37: Appealing types of bread for sandwiches, subs, and wraps, by parental status, May 2018
                                                                                    • Appealing Types of Protein

                                                                                      • Traditional meats remain most popular protein options
                                                                                        • Figure 38: Appealing types of protein for sandwiches, subs, and wraps, May 2018
                                                                                      • Top three meat options will reach more than 90% of diners
                                                                                        • Figure 39: TURF analysis – Protein preferences, May 2018
                                                                                      • Men relish meat, while women seek more veggies
                                                                                        • Figure 40: Appealing types of protein for sandwiches, subs, and wraps, by gender, May 2018
                                                                                      • Premium sandwiches with special meats may appeal to affluent diners
                                                                                        • Figure 41: Appealing types of protein for sandwiches, subs, and wraps, by household income, May 2018
                                                                                    • Appealing Types of Spreads or Sauces

                                                                                      • Mustard, ranch, and BBQ have maximum appeal
                                                                                        • Figure 42: Appealing spreads or sauces for sandwiches, subs, and wraps, May 2018
                                                                                      • Top five sauce/spreads will reach almost 90% of diners
                                                                                        • Figure 43: TURF analysis – Sauce preferences, May 2018
                                                                                      • Older consumers prefer mustard, younger consumers seek more varied tastes
                                                                                        • Figure 44: Appealing spreads or sauces for sandwiches, subs, and wraps, by age, May 2018
                                                                                      • Men find wide range of sauces appealing
                                                                                        • Figure 45: Appealing spreads or sauces for sandwiches, subs, and wraps, by gender, May 2018
                                                                                      • Pesto, aioli, and yogurt sauce have added appeal to more-affluent
                                                                                        • Figure 46: Appealing spreads or sauces for sandwiches, subs, and wraps, by household income, May 2018
                                                                                      • Parents over index for range of spreads and sauces
                                                                                        • Figure 47: Appealing types of spreads or sauces for sandwiches, subs, and wraps, by parental status, May 2018
                                                                                    • Innovations in Menus, Flavors, and Ingredients

                                                                                      • Interest is high in variety and high-quality ingredients
                                                                                        • Figure 48: Interest in innovations in sandwiches, subs, and wraps, May 2018
                                                                                      • Beyond fast food locations, customers especially primed to pay more
                                                                                        • Figure 49: Interest in innovations in sandwiches, subs, and wraps, by purchase location, May 2018
                                                                                      • Top five sauce/spreads will reach almost 90% of diners
                                                                                        • Figure 50: TURF analysis – Innovation interest, May 2018
                                                                                      • Younger consumers especially interested in innovation
                                                                                        • Figure 51: Interest in innovations in sandwiches, subs, and wraps, by age, May 2018
                                                                                      • Premium toppings engage women, while regional flavors appeal to men
                                                                                        • Figure 52: Interest in innovations in sandwiches, subs, and wraps, by gender, May 2018
                                                                                      • Affluent consumers interested in premium ingredients, new flavors
                                                                                        • Figure 53: Interest in innovations in sandwiches, subs, and wraps, by household income, May 2018
                                                                                      • Parents over index for a wide range of innovations
                                                                                        • Figure 54: Interest in innovations in sandwiches, subs, and wraps, by parental status, May 2018
                                                                                      • Breakfast sandwiches have high appeal to Black diners
                                                                                        • Figure 55: Interest in innovations, by race, May 2018
                                                                                    • Paying More for Special Ingredients, Menus, and Toppings

                                                                                      • About six in 10 ready to pay a dollar or more for premium protein
                                                                                        • Figure 56: Additional amount willing to pay more for premium proteins, May 2018
                                                                                      • Men more likely to pay more for premium proteins
                                                                                        • Figure 57: Additional amount willing to pay more for premium proteins, by gender, May 2018
                                                                                      • For premium breads, about half would spend an additional dollar or less
                                                                                        • Figure 58: Additional amount willing to pay more for artisan breads, May 2018
                                                                                      • Affluent are interested, but not necessarily ready, to pay more for artisan bread
                                                                                        • Figure 59: Additional amount willing to pay more for artisan breads, by household income, May 2018
                                                                                      • More than half of diners would pay $1 or more extra for limited menu items
                                                                                        • Figure 60: Additional amount willing to pay more for limited menu items, May 2018
                                                                                      • Women willing to pay, but not as much, for limited menu items
                                                                                        • Figure 61: Additional amount willing to pay more for limited menu items, by gender, May 2018
                                                                                    • Attitudes Related to Loyalty Programs, Delivery, Ordering

                                                                                      • Interest high in loyalty programs, mobile apps, and delivery
                                                                                        • Figure 62: Attitudes related to time saving, loyalty programs, delivery, and ordering, May 2018
                                                                                      • 18-34-year-olds eager for online ordering and delivery
                                                                                        • Figure 63: Attitudes related to time saving, loyalty programs, delivery, and ordering, by age, May 2018
                                                                                      • Online ordering and delivery highly valued by less-affluent consumers
                                                                                        • Figure 64: Attitudes related to time saving, loyalty programs, delivery and ordering, by household income, May 2018
                                                                                      • Busy parents prize the online and delivery tools that can save them time
                                                                                        • Figure 65: Attitudes related to time saving, loyalty programs, delivery, and ordering, by parental status, May 2018
                                                                                    • Attitudes Related to Variety, Freshness, Ingredients

                                                                                      • More variety and sliced-to-order ingredients are widely desired
                                                                                        • Figure 66: Attitudes related to variety and slicing to order, May 2018
                                                                                      • More than half concerned sandwich meats are too processed
                                                                                        • Figure 67: Attitudes related to sandwich meats and sandwiches as indulgence, May 2018
                                                                                      • Consumers 18-34 are especially interested in more variety
                                                                                        • Figure 68: Attitudes related to variety and slicing to order, by age, May 2018
                                                                                      • Parents also want more variety and value fresh-sliced ingredients
                                                                                        • Figure 69: Various attitudes, by parental status, May 2018
                                                                                      • Concern with processed meats higher among more-affluent consumers
                                                                                        • Figure 70: Various attitudes, by household income, May 2018
                                                                                    • Appendix – Data Sources and Abbreviations

                                                                                      • Data sources
                                                                                        • Consumer survey data
                                                                                          • Mintel Menu Insights
                                                                                            • Abbreviations and terms
                                                                                              • Abbreviations
                                                                                                • Terms
                                                                                                • Appendix – Consumer

                                                                                                    • Figure 71: Population by race and Hispanic origin, 2013-23
                                                                                                • TURF Analysis – Methodology

                                                                                                    • Figure 72: Table – TURF analysis – Innovation interest, May 2018
                                                                                                    • Figure 73: Table – TURF analysis – Bread preferences, May 2018
                                                                                                    • Figure 74: Table – TURF analysis – Protein preferences, May 2018
                                                                                                    • Figure 75: Table – TURF analysis – Sauce preferences, May 2018

                                                                                                Sandwiches, Subs and Wraps - US - August 2018

                                                                                                US $4,395.00 (Excl.Tax)